Wednesday, November 21, 2007

I'm Dreaming of a Rawlsian Thanksgiving

"A major part of John Rawls' theory of justice, justice as fairness, is the difference principle. The difference principle requires that 'social and economic inequalities be arranged so that they are...to the greatest benefit of the least advantaged.' According to Rawls, in a just society, deviations from social and economic equalities are permitted only provided that such deviations maximize the social and economic goods received by the typical person in the least advantaged class in society...The paradox is that by Rawls' own empirical premises - the very premises he uses to argue for the difference principle - in the long run, directly aiming to satisfy the difference principle would almost inevitably prevent the principle from being satisfied...Directly aiming at something is no guarantee of achieving it. For example, in the familiar paradox of hedonism, the act of aiming for pleasure is what prevents the agent from getting pleasure...Rawls' argument for the difference principle crucially relies upon certain premises about economics and incentives. The reason that deviations from strict economic equality are justified, Rawls thinks, is that it is necessary in order to improve everyone's economic condition. Permitting inequalities generates incentives to those with better capabilities and greater ambition, who then turn the wheels of economic growth. Rawls himself states that attempting to satisfy the difference principle (or any other egalitarian principle) lowers incentives and interferes with efficient market allocations, such that economies that are more egalitarian will not grow as quickly as 'unfair' economies...It is difficult to classify western nations under Rawls' categories of social systems...For example, current imperialistic American military institutions seem to belong to an archaic mercantilist rather than a capitalist system." [Jason Brennan, Constitutional Political Economy, December 2007]

(Nod to KL, who had the following comment in an email on this paper:Like Krugman, this (erudite) author lets his ideological bias undermine the quality of his argument. Rawls' writing is certainly susceptible to criticism, but it is a stretch to claim that a paradox arises in pursuing the difference principle simply because someone might feel more strongly than Rawls that, for example, market-driven economic growth accrues equally for everyone. No one disputes that market incentives are important for growth/ innovation/ efficiency. The question is really about the extent to which market-driven inequality produces incentive produces effort produces innovation/ efficiency produces growth produces improved welfare for the least advantaged. If all of the response-functions in this chain only slope upwards, then the case is closed: allow as much inequality as the market will bear. If not -- which would be consistent with the many inverted-U response-functions seen throughout social science -- then interventions to constrain inequality might be justified.)